Franchisors and franchisees urge legal certainty as debate flares over Corporate Transparency Act enforcement

At a House Small Business Committee hearing, franchisors, franchisees and anti‑corruption advocates testified that franchising remains an engine of small‑business job creation but said uncertainty over federal rules — from beneficial‑ownership reporting under the Corporate Transparency Act to changing joint‑employer standards — threatens franchise investment and expansion.

The hearing brought together franchisors and multi‑unit franchise owners, who described franchising as predominantly a small‑business model, and a Transparency International U.S. representative who defended continued enforcement of the Corporate Transparency Act (CTA). "Franchising is small business," said Randy Cross, president of Fish Window Cleaning, testifying that most franchise owners run a single location and that franchising supports nearly 9 million jobs and about $897 billion in economic output, figures he attributed to the franchise sector.

The disagreement centered on the CTA's beneficial ownership information (BOI) reporting. Gary Kalman, executive director of Transparency International U.S., argued enforcement remains critical for law enforcement and national security, warning that anonymous shell companies can be used to evade tariffs or launder criminal proceeds. "Without the CTA, this tariff dodge…